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A global round-up of new arbitral rules and impending updates to existing rules

In recent months, a number of arbitral institutions have launched, or have announced the imminent launch, of updates to their rules of arbitration. In this article, we look at these changes and highlight key points of interest.

New London Maritime Arbitration Association (LMAA) Terms

The London Maritime Arbitration Association (LMAA) Terms 2017 are now in effect for appointments on or after May 1, 2017. These seek to improve the time and cost efficiency of the LMAA while maintaining the LMAA’s ‘light touch’ approach. The LMAA has also released revised versions of the LMAA Small Claims Procedures and the LMAA Intermediate Claims Procedure.

Of most interest are new terms addressing: appointment of arbitrators where either a party fails to appoint its party‑appointed arbitrator in time or the parties are unable to agree on the sole arbitrator; obligations to make the arbitration process as cost effective as possible; powers to order security for costs; and increasing the maximum level for small claims to US$100,000.

Dealing first with the new terms addressing appointment of arbitrators; where one party has failed to appoint its arbitrator in time, the non‑defaulting party (having duly appointed its arbitrator) may give seven days’ prior written notice to the other party to appoint an arbitrator, failing which the non‑defaulting party’s arbitrator will be appointed the sole arbitrator and their award shall be binding on both parties.

There is also a new term which provides that where the parties have agreed to appoint a sole arbitrator but fail to reach agreement within 14 days of calling for arbitration, the arbitrator can be appointed by the President of the LMAA.

As for costs; the new terms emphasise the importance of cost efficiency and impose an express obligation on the parties and the Tribunal to actively consider ways to make the arbitral process as cost‑effective and efficient as possible. They also strengthen tribunals’ powers in respect of costs, including the power to require security for the tribunal’s own costs.

The new terms have been welcomed by the maritime arbitration community.

New DIS Arbitration Rules

The German Institution of Arbitration (Deutsche Institution für Schiedsgerichtsbarkeit, DIS) has implemented major changes to the DIS Arbitration Rules. These are the result of extensive consultation over the last two years.

The updated rules continue to have a focus on supporting early settlement, but also represent an attempt to modernise DIS arbitrations implementing widely used best practices under comparable regimes. The rules are designed to assist international and domestic parties, whilst retaining certain key elements linked to civil law proceedings. Key motivations behind the revisions were to enhance the efficiencies afforded by arbitration under the DIS Rules, and to provide a modern, non‑bureaucratic flexible system in line with comparable arbitral regimes.

Highlights of the amendments include

A renewed focus on efficient conduct of the arbitration, particularly evident with the implementation of shorter deadlines, including reducing the time for appointment of arbitrators; new early filing rules; and a shorter indicative time limit for the return of the award which requires the tribunal to finalize its award “in principle within three months after the last hearing or the last authorized Submission.”

More detailed rules relating to more complex proceedings. The amended rules include provisions for multi‑ contract and multi‑party proceedings within a single arbitration providing relevant agreements are in place, allow for the joinder of additional parties through the submission of an additional Request for Arbitration prior to the appointment of the tribunal and allow for the consolidation of proceedings.

The creation of the “Arbitration Council.” The newly constituted institution will be competent to rule on a variety of issues including the appointment of a sole arbitrator in instances of non‑party agreement as to the composition of an arbitral tribunal, the authority to handle challenges to an arbitrator (previously this function rested with the tribunal itself under the 1998 rules), and the fixing and reduction of arbitrator fees.

It should be noted that whilst the new rules implement welcome efficiencies, there are some notable differences to comparable regimes. These include no provisions for the appointment of an emergency arbitrator, no mechanism for the expedited formation of a tribunal, and no opt in system for expedited procedures where lower sums in dispute are concerned.

The Hong Kong International Arbitration Centre (HKIAC) is proposing amendments to the 2013 version of its Administered Arbitration Rules (2013 Rules).

The HKIAC does not contemplate a wholesale revision, rather, the proposed amendments are aimed at addressing practical problems arising from the surge of international arbitrations and enhancing efficiency in arbitral proceedings.

Highlights of the proposed amendments include

The use of secured online repositories for the submission and storage of any written communications in an arbitration.

Introduction of multilingual procedures for bilingual or multilingual arbitration so that where all members of the arbitral tribunal are proficient in all languages of the arbitration, the arbitration may be conducted in one language only.

New provisions requiring disclosure when there is a third party funding arrangement in place and allowing disclosure of information to a third party funder which is otherwise confidential (these mirror the changes brought about by the Arbitration and Mediation Legislation (Third Party Funding) (Amendment) Ordinance 2017).

New provisions allowing the tribunal to hear multiple proceedings concurrently, or one immediately after another, or stay any of those proceedings until after the determination of any other, in situations where a common question of law or fact arises and the arbitrations have not been consolidated.

The proposed amendments are now at the public consultation stage.

Asian International Arbitration Centre launches

The Kuala Lumpur Regional Centre for International Arbitration (KLRCA) has rebranded and relaunched as the Asian International Arbitration Centre (AIAC). The AIAC has adopted new arbitral rules, based largely on the UNCITRAL Arbitration Rules 2013, and published a new model arbitration clause. Key features of the new AIAC rules include provisions dealing with expedited appointment of emergency arbitrators, new powers to consolidated proceedings, and amendments to the provisions dealing with joinder and technical review of awards.

The AIAC administers international commercial arbitration under its AIAC Rules as well as offering fast track arbitration and Shariah (Islamic law) arbitration. In addition AIAC offers mediation, adjudication, and resolution of domain name complaints. Its facilities are also available for investment arbitration — it has arrangements with both the ICSID and the PCA, and AIAC is itself an administrating authority under the 2009 ASEAN Comprehensive Investment Agreement.

The Dubai International Arbitration Centre (DIAC) has recently announced its intention to launch a new set of Arbitration Rules in 2018 (the New Rules) to replace the existing 2007 Rules. Although the New Rules are yet to be published, DIAC has released details of its proposed changes. These include

The default seat of arbitration will be the Dubai International Financial Centre (DIFC) rather than onshore Dubai. This will give the DIFC Courts supervisory jurisdiction over parties who do not specify the arbitral seat in their contracts, which may make it more difficult for unsuccessful parties to challenge awards. It may also make enforcement easier, given that the DIFC Courts can convert an award rendered in a DIFC‑seated arbitration into a DIFC Court judgment and refer that judgment to the Dubai Courts for automatic ratification and execution. That said, it remains to be seen the extent to which the ready and smooth enforcement of a DIFC‑seated award and subsequent court judgment before the onshore courts will be curtailed by the Judicial Committee which was established pursuant to Decree 19 of 2016. (See our related article in this issue.)

Awards will be deemed to have been rendered at the seat of arbitration even if the tribunal is not physically present there at the time the award is signed. This addresses Article 212(4) of the UAE Civil Procedures Law, which provides that an award must be “issued” in the UAE in order to be regarded as a domestic award.

The tribunal will have the power to award legal costs, including fees for legal representation. The 2007 Rules made no reference to the recovery of such costs and the Dubai Court of Cassation subsequently held (in case number 282/2012) that the tribunal did not have authority to award legal costs without the parties’ express agreement.

Parties will be able to apply for arbitration proceedings to be conducted on an expedited basis. This may apply if the amount in dispute is less than AED 2 million or in cases of exceptional urgency. Expedited cases will generally be decided by a sole arbitrator on the basis of documentary evidence only and within three months from the date that the tribunal receives the file.

The DIAC Executive Committee will have the power to appoint an emergency arbitrator upon the application of one of the parties prior to the constitution of the tribunal. The emergency arbitrator, who will be appointed within three days of receipt of the application and accompanying fee, will have the power to order or award any interim relief deemed necessary, such as attachment orders against a debtor’s assets.

Tribunals will be entitled to impose sanctions on parties and their counsel for misconduct, including attempts to frustrate the arbitral process. It is unclear, however, how tribunals would have jurisdiction/authority over counsel in respect of such sanctions.

DIAC will be able to publish awards, either with the consent of the parties or in redacted form to preserve the confidentiality of the parties.

The New Rules, which are intended to address some of the common issues encountered in UAE‑seated arbitrations, are currently expected to be enacted during the first quarter of 2018. It remains to be seen how some of these changes will apply in practice, but their issuance is viewed as a positive step.

UAE set to implement new arbitration law

In a welcome move for businesses and arbitration practitioners in the Middle East, the United Arab Emirates’ advisory parliament, the Federal National Council, has recently approved a new arbitration law for the UAE.

It is anticipated that the new arbitration law will be passed later this year, once it has been approved by the President of the UAE and presented to the Federal Supreme Council for ratification.

The new arbitration law will replace Articles 203 to 218 of the Civil Procedures Law. Although the contents of the new arbitration law are yet to be published, it is expected that it will be largely based on the UNCITRAL Model Law, a model for international commercial arbitration that has been adopted successfully in many jurisdictions worldwide. The new arbitration law will apply to all arbitration proceedings in the UAE except those seated in the Dubai International Financial Centre (DIFC) or the Abu Dhabi Global Market (ADGM), autonomous free zones within the UAE that have their own courts and arbitration laws.

If, as hoped, the new arbitration law specifies clear and limited grounds for setting aside and challenging awards and provides procedures for expediting the recognition and enforcement of awards in the local courts, it will help cement the UAE’s position as a seat of choice within the region.

The authors would like to thank Matthew Gregson and Santiago Lev, trainees in the London office, for their contributions to this article.

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